By Kevin McCauley
Edelman is working HP news that it’s taking an $8.8B “impairment charge” for software unit Autonomy, which previous management under Leo Apotheker acquired in a $10B deal.
That write-down put HP $6.8B into the red ink column for the fiscal fourth quarter ended Oct. 31 on $36.4B revenues, which were down 6.7 percent from a year ago.
The Palo Alto giant claims an internal investigation and forensic review have uncovered “accounting improprieties, misrepresentations and disclosure failures in Autonomy’s financial statements prior to its 2011 acquisition.”
HP claims former members of Autonomy’s management team were behind the financial shenanigans in an apparent “willful effort to mislead investors and potential buyers and severely impacted HP’s management ability to fairly value Autonomy at the time of the deal.”
Former Autonomy CEO Mike Lynch denies any wrongdoing, claiming the first time he heard of the accusations was with today’s HP’s press release.
HP has referred the Autonomy matter to the Securities and Exchange Commission’s Enforcement Division and the UK’s Serious Fraud Office for civil and criminal investigation.
It will seek to pursue the matter in civil courts to “recoup what it can for its shareholders.” John Schultz, executive VP/general counsel, headed the internal probe.
Edelman’s Jo Sheldon and HP’s Michael Thacker handle the press concerning Autonomy.
Apotheker said in a statement via Healy Corporate Communications that he is "both stunned and disappointed to learn of Autonomy's alleged accounting improprieties." |